Explain why Environmental degradation is an economic problem

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Environmental degradation describes the way that our environment or the earth is deteriorating from natural phenomena. Most of the degradation issues can be prevented by understanding what causes them. So let's discuss this.

What is environmental degradation?

Degradation of the environment is a process by which the environment is damaged through natural processes and human activity. Often degraded environments are unusable because of pollution, excess pressure, disruption of ecosystems or loss of productive capacity. Degradation of the environment is a real and serious concern.

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 What is environmental economics?

 What is Externality in economics?

First you need to understand that there are few definitions to describe the words used to describe the situation. Most people use a three word or less definition to describe the problem and say that the problem is environmental degradation. Environmental degradation includes various scenarios including environmental degradation caused by human activities that severely impacts environment and the public.

Environmental degradation is an economic problem

Economics is a subject which studies the management of scarce resources. It is the scarce of the resources which generates different economic problems. The main trade off is limited resources and unlimited wants of the human beings.

Explain why Environmental degradation is an economic problem

Environment is the supplier of different types of resources-renewable resources and non renewal resources. The consumption and production activities of an economy direct depend on the availability of natural resources.

The productive activities or sector collect differ raw material and energy resources from the natural environment. Without natural resources the productive activities are meaningless. Increase consumption and production activities results degradation of natural environment or quality of environment. It creates following problem-  

(i) As higher grade resources are exhaustive lower grade resources are found in greater abundance.

(ii) As a particular resource becomes scarce, prices raises are offset by switches in demand to substitution.

(iii) Increases in prices stimulate exploration for new deposits.

(iv) Technical progress influences the efficient use of scarce resources.

Thus it is cleared that environmental degradation is an economic problem. It is closely associated with production, govt polices and above all economic welfare of the people. 


Environmental degradation could have a direct negative impact on human health, environment and biodiversity. Environmental degradation is a state in which there are significant negative consequences or environmental and human health effects, either through the introduction of toxins, or by the changing of natural processes.

As for example climate change. environmental degradation is one of the main global problems affecting all the countries of the world and the world has signed many agreements regarding the problem of environmental degradation. There are two approaches to understanding the causes and consequences of environmental degradation.

So friends, this was 'Explain why Environmental degradation is an economic problem'. Hope you get the full details about it and hope you like this article.

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